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Inflazyme Shareholders Approve Asset Sale to Biolipox

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 16, 2007) - Inflazyme Pharmaceuticals Ltd., (TSX:IZP) today announced that its shareholders approved the sale of the majority of its research and development assets to Biolipox AB, a Swedish pharmaceutical company. Of the votes cast, 98% were in favor of the resolution for the sale of the assets.

In return for the sale of its assets which consist of the PDE inhibitors, the LSAIDs™ and the Protein Therapeutics technology, Inflazyme receives $4 million in cash and up to $7 million in potential milestones plus royalty payments which comprise the following: (i) $1.5 million upon a decision to enter a Phase 2b clinical study with a PDE inhibitor; (ii) $2.5 million upon a decision to initiate a Phase 3 study with a PDE inhibitor; (iii) $3 million upon a decision to begin a Phase 3 clinical study with an LSAID™; and (iv) a royalty of 1.25% on net sales of the first PDE inhibitor commercialized. Inflazyme may also receive up to 35% of the proceeds from the subsequent sale or licensing of the Protein Therapeutics technology if this occurs within 12 months of the asset sale. There can be no assurance that the milestones, royalty, and payments related to the sale of the Protein Therapeutics technology will be achieved. This transaction is expected to close on Monday November 19, 2007 but in any event before the end of the month.

The acquisition of Biolipox by Orexo AB, a public Swedish pharmaceutical company (OMX Nordic List, Mid Cap: ORX), was recently approved by the Orexo shareholders. The purpose of this transaction was stated to create a specialty pharmaceutical company with a broad product pipeline and an established sales channel. Dr Torbjorn Bjerke, the former President and CEO of Biolipox will be appointed as the President and CEO of the merged entity which will retain the name Orexo. The Orexo transaction is expected to close later this month. Inflazyme has been assured that its technology remain important assets in the new combined entity of Orexo.

New Inflazyme Board of Directors

As advised in the Management Information Circular, if the transaction with Biolipox was approved, three members of Inflazyme's Board of Directors would resign. Dr. Joe Davie, Dr. Walt Lovenberg and Dr. Richard Jackson have agreed to resign because of the reduced needs of the Company. The Chairman of Inflazyme's Board said, "On behalf of Inflazyme shareholders, the Board of Directors and the management at Inflazyme, I wish to thank Joe, Walt and Richard for their dedication and commitment to the Company. They have all played vital roles in the stewardship of Inflazyme and I wish them the very best in their future activities as we progress to the next stage with Inflazyme." The remaining Inflazyme Board members are Mr. Jeremy Curnock-Cook, Mr. Lou Drapeau and Dr. Kevin Mullane.

Next Steps

The Board of Directors and management are currently evaluating the feasibility of a second transaction for shareholder benefit before the end of the year. The assets remaining within the Company consist of cash, some very early stage technologies as well as the potential proceeds from the Biolipox transaction in the form of milestones, a royalty payment and possible payment from the sale of the Protein Therapeutics technology. Through the exercise of a rigorous process, the Company is currently evaluating potential opportunities for a second transaction where Inflazyme shareholders may have an ownership position in a new entity. There are no guarantees that a formal offer will be forthcoming before the end of the year or indeed whether the nature of the offer will benefit Inflazyme shareholders. Any new proposal recommended by the Board would likely be subject to a shareholder vote. In the event that a suitable transaction is not available to the Company before December 31, 2007, the Inflazyme Board of Directors may distribute net proceeds from the Biolipox transaction, after all liabilities have been paid, to shareholders and liquidate the remainder of the operations to affect an orderly wind-up. Inflazyme may exist as a legal entity, with no continuing business, in order to collect the potential milestones and royalty payments for future distribution to Inflazyme shareholders.

About Inflazyme

Inflazyme Pharmaceuticals is a biopharmaceutical company in respiratory and inflammatory diseases. Further information on the Company may be obtained from its website at www.inflazyme.com.

This news release contains certain "forward-looking statements" and "forward-looking information" which may include but is not limited to statements in respect of our future financial position or operations. Words like "believe", "intend", "may", "expect", "anticipate", "plan", "should" and other similar expressions are forward-looking statements that involve a number of risks and uncertainties. By their nature, forward-looking statements involve numerous factors, assumptions and estimates, some but not all of the factors that could cause actual results to differ materially from those projected in our forward-looking statements include among others: risks associated with the completion of clinical trials and obtaining regulatory approval to market our products, market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; and other risk factors identified from time to time in the Company's regulatory filings. For a further description of the principal risks affecting the Company, see our regulatory filings. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements.